MYTH: Older Americans need exceptional protection because they are poorer and more vulnerable than the rest of society. REALITY: Incomes and net worth for the elderly have risen since 1989 while dropping for the young and middle-aged. The economic and financial status of older Americans was spelled out in a study released in September by […]
MYTH: Older Americans need exceptional protection because they are poorer and more vulnerable than the rest of society.
REALITY: Incomes and net worth for the elderly have risen since 1989 while dropping for the young and middle-aged.
The economic and financial status of older Americans was spelled out in a study released in September by the Federal Reserve Bank of St. Louis. The authors of the study defined the age groups as “young,” meaning under 40 years of age; “middle-aged,” 40-61; “younger-old,” 62-69; and “older-old,” 70 and over.
Tracking these groups since 1989, the median, inflation-adjusted family income for the young dropped 6.1 percent and 2 percent for the middle-aged. For the two older categories, income increased 60.5 percent for those 62-69 and 27.9 percent for the 70 and over category.
The median, inflation-adjusted net worth during the same period fell 30.5 percent for the young and 24.1 percent for the middle-aged. The younger-old group ballooned 74 percent and the older-old group rose 47.7 percent.
Any notion that this problem is only related to the recent recession is belied by the research. Older families have fared better than younger families both during periods of economic and financial weakness and during periods of economic strength.
The study concludes that seniors are better off, in large part, because they are highly motivated to save, resist excessive indebtedness, and have diversified their assets. The authors also sound an ominous note that the younger and middle-aged groups will not experience the same favorable income and wealth outcomes going forward as their elders.
Which brings us back to the myth that keeps Social Security and Medicare on funding autopilot. The stereotype of the poor elderly is politically useful, because no one wants to take anything away from grandma. The problem is that Americans are incapable of having an intelligent discussion about where to place the safety net for those who are truly needy at the same time the two federal programs are on financial life-support.
The other problem is that the younger generations are unduly burdened with supporting us (I speak as a geezer), while anticipating a lower programmatic return when they join the ranks of the seniors. This, of course, assumes the two programs are even functioning. We’re living in a time-warp where we still think it is 1935 and 1965 and the country can support ever more generous “entitlements.”
The economic plight of younger Americans should make all of us face reality. It’s time to stop pampering seniors and worry about the next generations.
Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com
